Seattle-based Amazon is looking for another city to build its second headquarters and has plans to invest $5 billion and create 50,000 jobs. Jane Lee reports.
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Amazon will have more experience and money than those who want HQ2, and will be focused on what’s best for Amazon. Feel free to say no or walk away.
Congratulations! Amazon is offering your metropolitan area the chance to bid to be the location of its new second headquarters. This is an opportunity to bring 50,000 high-paying jobs to your town. It’s also an opportunity to waste several billion dollars, as well as much time and effort.
Elected city officials (who at the highest levels generally make less than $250,000 a year) are about to negotiate with Amazon founder Jeff Bezos (net worth of about $80 billion). Amazon’s team will be more experienced, better paid and have better resources than the government teams. More important, the Amazon team will focus keenly on what’s best for Amazon. The government teams, however, won’t necessarily be focused on what’s best for taxpayers.
They might be more interested in what’s best for the careers of elected officials (who will want a photo op with Bezos as they announce 50,000 jobs). If the deal they make turns out badly — the jobs don’t happen — those officials will likely have already moved on to something else. But the taxpayers will be stuck paying the bill.
Governments are badly suited to picking winners or losers, so they should generally focus on providing a level playing field for everyone. A big subsidy for Amazon HQ2, as Amazon calls its new headquarters project, might make sense if Amazon is one of the long-term winners in the ever changing American economy. The technology sector has many examples, however, of great companies that failed (Digital Equipment Corp., Wang Laboratories, Prime Computer) or stopped growing and/or shrank (AOL, Yahoo). If Amazon fails, stops growing or simply changes its strategic direction, it may not need HQ2 (the initial build out for this project is supposed to take at least 15 years — a lot of things can…